When White House Counsel John Dean infamously told President Richard Milhous Nixon that there was a “cancer on the presidency,” and that more hush money would be needed to keep the cover-up of the Watergate break-in secret, Nixon responded without much hesitation that he knew where he could get a million dollars in cash. The President was used to having vast resources at his fingertips because of the millions flowing through his campaign committees. Historians now know that much of the money flowing through those committees was from illegal sources.

This essay is a synopsis that illegal money and two of the reforms it inspired: the Federal Election Campaign Act and the Foreign Corrupt Practices Act. This piece will argue that the scale of post-Watergate reforms were justified by the magnitude of quid pro quo corruption in the Nixon White House. This essay will also argue that in 2012, in this post-Citizens United environment, Congress should take a similar approach and embrace both campaign finance reforms as well securities law reforms to ensure the integrity of our democratic processes.

This Article offers a case study of Democratic Governors Association (DGA) and the Republican Governors Association, two central financial actors in recent state elections. Between 2002 and 2010, the period that this Article will cover, the Governors Associations participated in gubernatorial elections in forty-eight of fifty states and spent nearly half a billion dollars, yet they have largely escaped regulation by state elections officials in the very states where they lavish money electing governors. But the simple recipe for how the Governors Associations evade campaign finance regulations is not unique to these two groups. Potentially any multistate group may evade these state anti-­corruption laws in the same way.

The Governors Associations are everywhere, but in a real sense, they are regulated almost nowhere. What little regulation falls on them is not imposed by the fifty states, but rather by the IRS, which requires the Governors Associations to report their income and spending. This IRS reporting reveals that much of the money filling the coffers of the Governors Associations is actually corporate. A majority of the corporate contributions (over 65%) comes from publicly traded corporations, which raises corporate governance issues as well as democratic concerns.